Comparison of Reduced-Fare Programs for Low-Income Transit Riders

Document Type

Journal Article

Publication Date

2021

Subject Area

place - north america, policy - fares, policy - equity

Keywords

Discount fares, Equity, Low income groups, Subsidies, Transit riders

Abstract

Means-based reduced-fare programs can help address transit rider fare equity. The objective of this study is to synthesize the current state of reduced-fare programs for low-income transit riders. The reduced-fare programs of the 50 largest transit agencies in the United States were examined and agencies with programs for low-income riders were compared based on three dimensions: eligibility and enrollment, fare media and discount pricing, and estimated transit expenditure by eligible riders. The results reveal that 17 of the 50 largest transit agencies have low-income reduced-fare programs. Of these, 14 agencies administer the programs themselves, while three use partnerships with social service organizations to administer them. Additionally, nine of the 14 agencies that administer their own programs provide a 50% discount on fares and require participants to have an income at or below 125% to 200% of the federal poverty level for eligibility. Using a method developed to evaluate the “fare burden” of transit riders with different income levels, it was determined that low-income reduced-fare program participants at the income eligibility threshold typically spend an estimated 2% to 6% of their annual income on transit, although very-low-income people may need to spend much higher shares of their incomes on transit fares. These results indicate that agencies may need to reevaluate the structure of their existing low-income reduced-fare programs and implement tiers of discounts to ensure that fare equity is being extended to all riders.

Low-income people make up 37.8% of transit riders in the United States (1), and 40% of transit riders in the United States use transit because of a lack of vehicle ownership or money for an alternative (2). A disproportionate population of low-income people are transit dependent and lack the means to change transportation modes even if using transit does not make economic sense (3), leading to low-income transit riders having to make difficult financial trade-offs, such as foregoing food, housing or personal care to pay for transit (4). Therefore, the price of transit may take a disproportionately greater toll on the low-income riders who depend on it most (5).

Transit agencies have developed different equity-related programs to help lessen the impacts transit fares can have on low-income riders. Strategies include adjusting fare prices based on distance and time of day (6), using smart cards to automatically calculate the best fare for a user (7), and using free feeder transit lines to increase access to larger transit markets (8). Another strategy is using direct subsidies targeted to riders with the greatest financial need, basing eligibility on either a specified income level threshold or prior qualification for another state or federal welfare program (9). This means-based strategy is the focus of this paper.

Despite the societal benefits of administering low-income reduced-fare programs, they are not universally implemented across all transit agencies in the United States. This could make it difficult for an agency considering starting a program to identify what features to implement or for agencies with existing programs to identify ways to make theirs more effective and equitable. This paper serves to fill this gap by contributing a synthesis of existing low-income reduced-fare programs implemented by large transit agencies, a comparison of the programs, the identification of common practices, and a method to evaluate the transit “fare burden” of reduced-fare programs.

Rights

Permission to publish the abstract has been given by SAGE, copyright remains with them.

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